Fiscal cliff may derail eco-devo plans

Seven months after Republican legislators and leaders of the Colorado Office of Economic Development and International Trade (OEDIT) clashed over eco-devo plans for the 2012-13 fiscal year, there’s been more acceptance of Gov. John Hickenlooper’s job-creation proposals for next year.

But the Democratic governor’s efforts to get more funding for film incentives, tourism marketing and job-creation incentives still could run into a roadblock if America plunges off the “fiscal cliff” and the state loses hundreds of millions of dollars in funding, legislators warned.

Hickenlooper’s proposed budget for the fiscal year beginning in July 2013 includes about $6.6 million in combined increased funding for those areas and to create a program to retain growing Colorado businesses. The Joint Budget Committee (JBC) got its first briefing on the proposal on Dec. 10.

Rep. Cheri Gerou, R-Evergreen, was part of a group of Republican legislators who killed several OEDIT program bills earlier this year and fought the office on a request for a $4 million boost in job-creation incentives before agreeing to allocate the money in May.

OEDIT leaders, such as Executive Director Ken Lund, failed to explain why the money was so needed at the time, but Gerou and other legislators worked with the office last summer and saw how the money has helped attract jobs from companies such as Hitachi Data Systems and Coleman Co. Inc., she said.

“I actually feel like there is more credibility this year,” Gerou said. “I’m really starting to see some of [OEDIT’s plans] come to fruition ... It really looks like there’s some cohesion there now.”

Sen. Pat Steadman, a Denver Democrat and JBC chairman, wants to hear more specifics on the OEDIT proposals before backing them.

However, the entire discussion could change if the federal government fails to find a solution to avert a series of tax increases and spending cuts to federal programs that the state government likely will have to backfill, he said.

“I’m open to the governor’s request, and I think there are some fine things in there,” Steadman said. “If we go over the cliff, there’s probably going to be a re-examination of some programs that lose federal funding that are vital.”

Much of the requested new money — $3 million — would go to OEDIT’s strategic fund to attract relocating or expanding companies. That new money could create as many as 1,230 new jobs, the governor’s office said.

That money is less than the $4 million in additional funding the office got tacked onto its $2 million annual allocation for the current fiscal year. But Lund said the new money would be a permanent addition for years going forward, which provides more long-term certainty.

“We had clients we work with during [the funding debate this year] who we weren’t able to commit a source of funds to,” Lund said. “If we had a more permanent fund, we could plan better.”

A $1 million one-time allocation Hickenlooper is requesting for film incentives next year is smaller than the $3 million, one-time allocation he pushed through to seed the incentive program in the current fiscal year. And the $600,000 the Democratic governor wants to start a business-retention program is a new request.

Hickenlooper also seeks $2 million in new money for tourism promotion and branding that the Colorado Tourism Office (CTO) would earmark for specific programs. A total of $975,000 would go to increased spring and summer TV advertising campaigns, and $325,000 would be directed to a larger winter ad campaign.

Also, $500,000 would go to create a platform to increase the branding power of the state and attract more visitors and business capital. And the CTO would spend $200,000 to attract new international flights from countries that have increased U.S. visits in recent years, including Brazil, China, India and Russia, budget analyst Kevin Neimond told the JBC.

Rep. Crisanta Duran, D-Denver, said she’d like to learn how many jobs created by companies that received strategic fund money went to graduates of Colorado colleges and universities. She also wants to examine whether companies getting state funds are hiring in-state.